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What happens after Product Market Fit?



Today, we are talking about expansion.


A lot of content, and programs, help startups craft MVPs to get to Product-Market-FIT, (though I will use Product-"Category"-FIT, given that most of the time, the market does not really exist yet), and that is also when Series A funding happens. But, I don't see much content and model for "A" to Scale. Many startups continue to do what they do at "PCF" stage, thinking that "POOF" scale is guaranteed with more resources funded from investments, no wonder only 20% of funded Series "A" startups survived.


The counterintuitive thing is, that the PCF stage was meant to be a "data-gathering" process, to DIVERGE and iterate as much as possible, and identify the right signals so that one can then CONVERGE and FOCUS only a few things for the next stage of Go-To-'Segments' FIT, to get to TRACTION, which will then create momentum towards Scaling.


See below image of the stage after PCF:




At the GTM phase, before scaling, you are still learning and iterating on different things with different anchor points in both stages.


The GO-TO-"SEGMENT" FIT stage


This is the critical stage where not only do you have to leap "across the chasm", but you have to validate that it is a scalable and profitable "product/offer", in terms of market, commercial viability, and how fast you need to grow. And the design of the "model" or "offer" needs to address a few key gating criteria and show a pathway to profitability and scalability through segment acquisitions.


Because of needing to spin all these plates and to make a series of key decisions quickly to get to FIT; most meandering, "follower-type" startups without clear direction, tend to spiral out of steam.


The typical, not enough business/momentum, therefore not enough money/investment, chase after every prospect and having lackluster response death spiral.


Basically, stuck in Chasm.


Therefore, it is important to design a roadmap to get viral traction within the segment and between segments ASAP.


As much as that is the target outcome, there are a series of steps that are necessary to execute on, in order for the "domino effect" to happen.


The most counterintuitive one, is to converge and be narrowly focused, laser-focused till it burns a hole kind of narrow, in order for it to be significantly impactful enough.


Instead, a lot of startups go broad and wide to partner with everyone and work with everyone who is willing, basically the same modus operandi as the PCF stage. Typical symptoms are the diverging product requirements from sales and confused product teams.


Let's look at what it would look like if there was a Go-To-Segment FIT.


As defined below, Go-To-Segment Fit is when the expansion is aligned and leveraged in a sequential manner that is optimised for virality and therefore lower CAC and maximising product development ROI.





There are key drivers why this is uniquely relevant for a Startup's GTM that is different from a matured product's GTM.


A startup's "product/offer" is still evolving and at different stages of development.

There are always POTENTIAL segments and customers with GAPS to plug. And within segments, there are different levels of adopting mindset and tolerance to buy.


The only key resource a startup cannot afford to lose is "TIME". The longer it drags, the more cash is burned. The more mistakes and rabbit holes it goes down, the lower the probability to hit home run.


A leveraged expansion model looks more like this image below, where you know what you can offer clearly for each segment from a "product/offer" perspective that is compelling for each segment. And usually, the offer is an outcome/side-effect from engaging the previous segments.







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